Big Question; How will Bitcoin Deal with Threats?

As banks across Canada are closing due to the sheer number of citizens taking their money out of banks.  Here in the US, the situation is beginning to look similar.  The trucker rally’s are heading to DC.  Once they get there, we will see how the Biden Administration reacts.  Too soon to know that now.  However the pension system is clearly underwater.  This next chart shows a $1.4 trillion deficit in funding US Pensions in 2021.  Every year this deficit or unfunded liability gets worse.  Below is the chart:
 

 

If you are asking why, the next chart will help explain it.  These are the longest bond bear markets in 10 yr treasuries.  All of these bear markets lasting the longest, have been since 2013, with the lone exception being the 309 day 98’ to 99’ bond bear market.  The current bear market has lasted 547 days!  We can expect, due to the length of this bear market, a small rate hike in March.  However, this bubble is so big, we question the Fed will be willing to let this correction play out.  Here is the chart below:

 

 

A week ago, in a blog, we said if 10 yr bond yields were 11.5% the cost of federal debt service would be $3.3 trillion.  Now let’s expand on that!  That was 10 yr bond yields in 1982!  Back then Paul Volker (Fed reserve chairman) was able to raise rates like that.  Not possible now because federal debt is $30 trillion.  In 1982 it was $1 trillion. Debt service on $30 trillion will be too expensive.  Therefore, the Fed HAS TO devalue the dollar!  No way around it.  However, fiat currencies, governments, and central banks, that foist them on their citizens worldwide.  They don’t want any alternative to a devalued dollar.  So what do they do?

Here is what they do, they threaten the countries that have made Bitcoin legal tender.  They don’t want this freedom to spread:

What is Bitcoin’s answer to this threat from fiat currencies, governments, and central banks?  Here is one answer:

 

Mine more Bitcoin.  As hash rate goes up, Bitcoin gets more seizure resistant, stronger, more decentralized.  So a higher hash rate is one answer.

 

Difficulty adjustment.  If quantum computers at some point, become stronger, more intelligent, the difficulty adjustment, inside the Bitcoin protocol, will add difficulty to the algorithym.  This means, regardless of quantum computing power, difficulty adjustment keeps each block being at 10 minutes, on average.  If Quantum computing means the algorithyms must get 100X more difficult, mining equipment has to adjust.  Difficulty adjustments may cause some miners to exit, but the blocks keep getting solved every 10 minutes. No mining ban, or government ban on Bitcoin has stopped it, ever. 

 

Below is a you tube video on the importance of Bitcoin’s seizure resistance, click here to view on twitter.

 

Turkey banned Bitcoin.  Below are internet searches for Bitcoin in Turkey.  The Turkish Lira went to $390K Lira per 1 Bitcoin:
 

 

Nigeria had a 27% increase in Bitcoin adoption and trading since that country banned Bitcoin. These bans never work, click here to read more.

 

China has banned Bitcoin multiple times, yet China leads the world in Bitcoin adoption.  

 

The most important economic fact of a Bitcoin ban, whatever its structure, is that it is literally impossible. Bitcoin can be run using shortwave radio, morse code on a wire — you could run it (slowly) using flashlights from zodiac boats off the coast, or smoke signals from the ragged peaks of the Andes.

 

This is because Bitcoin, fundamentally, needs nothing more than ones and zeros communicated from person to person, that is all. You can no more ban a shared ledger like Bitcoin than you can ban human speech, or light propagation through air.

This article from wired magazine is old, from 2019, but relevant on, to what lengths one can go, to make sure they have a connection to the blockchain, click here to read more.

 

Unlike in 1933, when Roosevelt confiscated all Americans Gold, just 20 years after President Wilson allowed the private central bank, to begin printing bank notes for the US.  Gold is now captured, and controlled, by derivatives trading, keeping it’s value low.  While Bitcoin is free to run up, based on demand.  Derivatives trading cannot impact Bitcoin like it does Gold.  Truly a free market, and one of the last free markets on Earth!  Roosevelt’s ban on Gold meant holders of Gold would get bank notes in exchange for their Gold.  Here is the executive order from 1933 on Gold:

 

 

Yes, Bitcoin is digital Gold and the best store of value on Earth.  However, with what we are seeing on the world stage.  It’s seizure resistance and censorship resistance may be more important. 

 

Below is some analysis from earlier this week on Bitcoin.  It has held support at or near $40K even today.  Today is the worst day of the week for price action and the low today is $39,450.  Bitcoin has printed a reverse head and shoulders pattern seen below, in the chart.  Thanks to Crypto Zombie for this chart.  If Bitcoin were to range back up to $70K then it could potentially, print a giant W pattern dating back to December 2020.  If that did happen by April or so.  Bitcoin would be poised to launch!:

 

 

We are watching Canada closely.  We know the trucker rally’s are coming to DC.  We love freedom, and Bitcoin is freedom.  If Justin Trudeau can shut down citizens bank accounts and insurance policies.  It can happen in the US as well.  Bitcoin is your chance at freedom, Bitcoin demand is peaking as the world figures out it’s seizure resistance and decentralization. 

 

One more tiny little tid bit.  Kevin O’Leary, Mr. Wonderful on Shark Tank.  He said yesterday, that he speaks to sovereign wealth funds in Saudi Arabia and Abu Dhabi, UAE.  Combined they have over $3.5 trillion in AUM.  If and when the US provides regulatory clarity on Bitcoin, they will invest between 1% and 3% of their AUM into Bitcoin.  Europe already approved a physical Bitcoin ETF.  Biden’s executive order (next week), to work towards regulatory clarity on Bitcoin and Crypto Currency, could propel Bitcoin emmensely, once this clarity is established.  In the meantime, once the Bitcoin ETF from Fidelity goes live, expect investment into that ETF from sovereign wealth funds until the US ETF is approved.  We are not financial advisors and this is not financial advise.  Having investment into the greatest risk asset in history, when regulatory clarity goes public.   This will issue in the greatest wealth transfer in history.  Fiat currency cannot survive longterm, and governments know that.  Thus, many financial experts believe government will regulate and not ban Bitcoin.  Either way, ban or regulate.  Bitcoin is not going anywhere.  If fiat currencies begin to hyperinflate, it stands to reason a government ban would be more likely.  Until then, regulatory clarity is more likely.  Both outcomes favor Bitcoin!!

 

Neutral ATM is here to get everyone off of zero Bitcoin. 

 

Give Neutral ATM a try.  We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.